Do We Need More Corporate Personhood, Not Less?

In the January/February issue of the Washington Monthly we have a feature from Boston College law professor Kent Greenfield on the efforts to codify into law the idea that corporations are not people. What’s interesting about it is that Greenfield doesn’t think these efforts are a good idea.

Many of the leaders of this movement are friends and respected colleagues. I contributed to Elizabeth Warren’s senatorial campaign and voted for [former Labor Secretary Robert] Reich when he ran for governor of Massachusetts. Forty years ago, my coal miner grandfather sat me down and told me how a union had saved his life. As a law professor, I have spent my career as an oddity—a progressive who teaches corporate law, almost always the most liberal person in any room of business law academics. A decade ago, I came up with a novel legal theory that shareholder activists recently put to good use suing the Hershey Company over the use of child labor in West African chocolate cultivation.

A corporate lickspittle I’m not.

But the attack on corporate personhood is a mistake. And it may, ironically, be playing into the hands of the financial and managerial elite.

What’s the best way to control corporate power? More corporate personhood, not less.

If, as I suspect, you are viscerally opposed to the idea that we need more corporate personhood, you owe it to yourself to at least hear Professor Greenfield out.

Without spoiling his argument, one of his key points is that we need corporate structures to shelter investors from losses that go beyond a reduction in share value. Without this separateness, concerns about liability will undermine our entire system of corporate investment. Whether we consider these separate entities to be “persons” or not, they should be legally distinct from the directors and shareholders. This is one reason why the Hobby Lobby decision was so poorly decided.

He makes other points that must be reckoned with. For example, if corporations are not people and do not enjoy constitutional protections, then perhaps they don’t have the same vigorous free speech rights that individual citizens enjoy. How would that have played out for the publication of the Pentagon Papers, for example? Or, could Planned Parenthood, a corporation, have been denied standing in court to argue Casey back in 1992?

Greenfield also points out that most of the money flooding into our elections over the last few cycles has come not from corporations but from individuals like Sheldon Adelson and the Koch Brothers. Those people certainly operate and control many corporations but restrictions on corporate giving would not have dissuaded or prevented them from injecting themselves in a big way into our electoral politics.

Perhaps the efforts to do away with corporate personhood are well-intentioned but aimed at the wrong target. Could it be that there is a better approach that aims instead at the dogma that corporations’ sole prime directive is to maximize shareholder value?

And could the anti-corporate personhood folks be inadvertently fighting to strengthen that dogma?